Litecoin holders are experiencing losses on their investments as the asset trades within a falling wedge pattern. In this pattern, the price moves between two downward-sloping trend lines, with the upper line acting as resistance and the lower line as support.
Litecoin entered the falling wedge pattern on March 31, leading to a 27% decline in its price since then. Currently, the altcoin is trading at $71.74.
When an asset’s price breaks above a falling wedge pattern, it signals a bullish trend, indicating that buyers are prevailing over sellers and suggesting potential upward movement in price.
According to on-chain data, market participants who sold their holdings after the breakout incurred substantial losses yesterday. The coin’s Network Realized Profit/Loss (NPL) metric showed a reading of -5.25 million during that period.
The Network Realized Profit/Loss (NPL) metric tracks whether holders of an asset across its entire network are selling at a profit or loss.
A dip in this metric indicates that, on average, holders are realizing losses on their investments. This signals a bearish market sentiment, as traders may be panic selling and experiencing capitulation.
Litecoin (LTC) Price Outlook: Rally Could Be Short-Lived
An analysis of LTC’s Price-Daily Active Address (DAA) Divergence metric indicates that the recent increase in the altcoin’s value may not be sustainable. This metric assesses how an asset’s price changes align with fluctuations in its daily active addresses, providing insights into whether price movements are backed by network activity.
If this happens, LTC’s value could decline to $70 at the 0.236 Fibonacci retracement level.
It may continue its upward climb to then trade at $78.11 if the current trend persists.
